Pay-TV customer needs and wants are purposely ignored — because the advertiser is the focal point of the legacy business model. In a report that attempts to quantify the costs of an à la carte pricing for cable television, Needham & Co.’s Laura Martin estimates that $45 billion of TV advertising would be at risk under such a change.
Along with 1.4 million American jobs, $20 billion in taxes paid by such cable operators as Comcast (CMCSA) and Time Warner Cable (TWC), and $117 billion in market capitalization.
Two small pieces of news could make for a big headache for legacy TV. First, Viacom yanked its 19 channels — including Nickelodeon, MTV and Comedy Central — from DirecTV after the two companies failed to agree on subscriber fees.
Second a federal judge cleared the way for Aereo, an exciting new startup that could bring local TV (NBC, ABC, CBS, PBS) to any device you wish, from a smartphone to an actual TV.
The Internet is ruthlessly efficient at stripping cross-subsidies and allowing content to shine on its own. The question isn’t really if the Internet’s unbundling revolution will visit the television industry but when.
via The Atlantic
Consumers in 2010 staged a mini-revolt, if you believe some sources, to redefine their TV viewing habits. Just as TiVo and all the DVR iterations that followed ushered in the era of time-shifted TV viewing, consumers began to experiment in TV place shifting as well, looking for ways to watch — and pay for — only the content they wanted, when and where they wanted it. Bundles? Increasingly coming under fire and even Hollywood — which jealously guards the gate to its content kingdom — is starting to take notice.